“However, reflecting higher domestic interest rates, debt servicing charges on the domestic debt stock are about three times higher than from the external debt stock,” notes the multilateral institution.

The Washington-headquartered institution had said in its previous report last year that there is low transparency and accountability in the bond market and this has kept away many foreign investors.

It added that Kenya attracts far fewer foreign investors into its local currency bond market relative to Nigeria, Egypt, Ghana and South Africa, even though it has grown very rapidly.

With a growing inclination towards foreign debt, the WB adds that a clear communication strategy on the government’s preparedness to tackle upcoming debt repayments remains critical to sustaining market confidence.

“Debt management strategy could also focus on rebalancing the mix of expensive and shorter maturity commercial loans,” the WB advises.

This, it says, could be done through taking advantage of concessional debt, which is more affordable and with longer maturity profiles.